- Asset Protection Planning
- Business Succession Planning
- Charitable Giving
- Disability and Special Needs
- Elder Law
- Executor and Trustee Responsibilities
- Financial Powers of Attorney
- Inheritance Planning
- Lifetime Gifts
- Medical Directives
- Planning for Minors
- Retirement Accounts
Is a Living Will the Same as a Living Trust?
This is confusing to many people, and quite understandably so, because the names are so similar. But these are very different documents, and they do very different things.
A living trust is for financial affairs. It is similar to a traditional will because it gives instructions for the disposition of your assets after you die. But, unlike a traditional will, a living trust also provides instructions in the event you become incapacitated before you die. After a living trust has been established, you transfer your assets to it by changing the titles and beneficiary designations of your assets to your trust. This keeps you, your family, and your assets out of the courts if you become incapacitated and avoids probate after you die.
A living will is for medical affairs. It is a document that lets your physician know the kind of life support treatment you would want in case of terminal illness or injury, in the event you cannot otherwise communicate your wishes to your physician. Through your living will, you appoint one or more health care “proxies”—people you trust who will communicate your end-of-life decisions to medical personnel. The wording in a living will is short and standard; you can get a copy from your attorney, doctor or hospital. But because the issues can often be confusing, it’s very important that you discuss your options with a knowledgeable estate planning attorney.
Living wills have limitations:
- A living will only addresses the use of life support and artificial nutrition and hydration in the event of a terminal medical condition or irreversible, permanent vegetative state.
- In some states, they are legally binding—if a doctor or hospital refuses to honor one, they must withdraw from the case. But in other states, they are not legally binding on anyone—if you have one, it is simply an expression of your wishes to your medical care providers.
- Doctors and hospitals are often reluctant to discontinue any life-sustaining treatment because they have been trained to save lives. If a family member objects to your wishes, it’s almost certain the doctor and hospital will not follow through as you have requested, for fear of being sued by unhappy families.
- In many states, a living will does not allow for nutrition (food and water) to be discontinued.
- Because a living will is a statutory document, the wording generally cannot be altered or personalized.
As a result of these limitations, many people also now have a durable power of attorney for health care. This document is legally binding and enforceable, and it applies in much broader medical circumstances. It lets you give legal authority to another person (called your health care agent or surrogate) to make any health care decisions for you if you are unable to make them for yourself, and regardless of whether you have a terminal condition or are in a persistent coma.
Be sure to share your thoughts and wishes regarding end-of-life issues not just with your agent, but also with your family, other loved ones and your doctor.
About the author
Vickie Schumacher is the author of the best-selling book, Understanding Living Trusts®, and is nationally known for her ability to explain the benefits of living trusts and estate planning in clear, conversational English. She has a unique perspective on what consumers want, what they understand, and what motivates them when it comes to estate planning—because she is a consumer, too.